Do any brands pay their workers living wages?
Currently, no major fashion brand pays all their workers a living wage; for most items, wages will scarcely exceed 3% of the retail price. This percentage is much lower for a luxury item since workers producing high-end garments earn similar wages than workers producing for high street brands.
How much would it take for brands to pay a living wage?
Take a look at Public Eye’s breakdown of the cost of a Zara hoodie, showing Zara makes more profit on one item than all the workers receive.
Wages represent a relatively low portion of the cost of each garment. If a piece of clothing is priced at €100, wages constitute only 3% (or €3) of that price, while brands typically pocket between €10-15 in profit. Luxury brands cash in much more due to a higher markup.
Because this percentage is so low, paying workers a living wage would be easy for brands. It is not the cost that stands between workers and living wages: it’s the brands’ willingness to enforce them.
If the price increased by €3, workers could earn double. But a brand could also absorb that cost and maintain a price of €100 for the consumer, reducing its profit to €12.
Brands spend millions on CEO pay, stock buybacks, dividends to shareholders, and destroying returned or unsold garments. They can afford to pay workers decently.
Paying higher wages doesn’t necessarily mean more expensive clothes. That being said, ultra fast fashion is also changing the perception of garments’ real cost — as the value of items is no longer reflected in prices due to environmental pollution and the use of forced labour. Making clothes responsibly has a cost that should be reflected in the final price.
Workers’ wages do seem low but isn’t the cost of living more affordable in garment-producing countries?
Garment-producing countries do have lower costs of living but that does not mean their wages are sufficient.
Less than 2% of garment workers earn a living wage.
Not a single fashion brand can claim all its workers are paid a living wage.
In Bangladesh, 91% of garment workers can’t afford enough food (Oxfam, 2019).
Garment workers earn on average 45% less than a living wage (Industry Wage Gap Metric, 2022).
That’s why we campaign for living wages, providing workers (and their families) the means to afford basic needs so they can live with dignity, reflecting the local cost of living to cover the cost of:
clean water and nutritious food
housing
clothing
education
healthcare
transport
unexpected expenses
savings.
The Asia Floor Wage uses an imaginary currency called Purchasing Power Parity $ (PPP$) to calculate living wages by region. Visit their site for more.